Deductions for Non-Itemizers

A statement from the Common Ground Project, urging government to make it easier for Americans to contribute to charity.

We are a diverse group of individuals from across this country's political spectrum who share a deep concern for the unmet human needs of people and communities in America, especially those who struggle with the effects of poverty. Since June of this year, we have come together as a Working Group on Human Needs and Faith-Based and Community-Based Initiatives.

We are united on the need for changes in the tax laws that will affirm the generosity of all Americans who make charitable contributions and unleash significant new resources for America's armies of compassion.

We are still working to fully define our areas of agreement and common ground. We have agreed not to take any public position on specific legislation, or whether Congress should consider any issue--including tax incentives--separately at this time, or later as a part of a comprehensive package.

Today, in advance of our final report, we issue this statement on tax incentives because President Bush has called upon Congress to bring this matter to the floor before Congress adjourns in December. When Congress does act, we believe it should:

1. Permit charitable tax deductions for non-itemizers. Today, upper- and middle-income Americans who itemize may deduct charitable contributions, not to exceed certain limits. Allowing deductions to non-itemizers will acknowledge all who give, and encourage many new contributions.

2. Allow deductibility from the first dollar contributed up to a ceiling equal to the standard deduction, as proposed earlier this year by President Bush. The first dollar from the person who cleans the building by night should receive the same treatment as that of the executive who runs the office by day. Further, at a time when Americans of modest means have sacrificed so much for us all, to set low limits on deductibility of contributions (such as the $25 limit on individuals set by the House), profoundly fails to properly honor those who give the most of what they have.

3. Ease limitations on charitable contributions from IRAs and other similar accounts. For many years, the tax code has given favorable treatment to taxpayers who contribute stock, pieces of art, and other appreciated property to qualified non-profit organizations. Those whose primary appreciated assets are contained in IRAs or other retirement accounts, however, incur significant tax liabilities if they make comparable gifts. We urge Congress to remove penalties on these generous Americans, providing them tax treatment at least as favorable as those allowed to high-income donors of appreciated assets.

The changes we recommend will be powerful symbols at a time when national unity is so important--when Americans are being asked to give from their time and treasure as never before. These incentives will also generate substantial increases in revenue for crucial community-based and faith-based organizations, groups that will leverage the dollars given with the time, energy, and compassion of volunteers.

There is no question that both government and the private sector need to address unmet human needs, and that community- and faith-based initiatives are a vital part of the equation. Resulting tax losses from any new tax incentive should not be used as a basis to reduce the nation's overall commitment to social programs through government action.

It is our hope that Congress and the President will build on the common ground that we all share: a deep commitment to address the unmet needs of children, families, and communities across America, especially those struggling with poverty and loss.

Working Group on Human Needs and Faith-Based/Community-Based InitiativesWashington, D.CNovember 16, 2001

Note: Steven Waldman, the co-founder of Beliefnet, is one of the participants in the working group. (Organizational affiliations of Working Group members listed below are solely for identification purposes).

Working Group on Human Needs and Faith-Based/Community-Based Initiatives*ChairmanHarris Wofford, Former United States Senator (D-PA)